The Vanguard Total International Bond Index Fund ETF Shares (BNDX) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. BNDX is a Vanguard N/A fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between BNDX and SCHP? And which fund is better?
The expense ratio of BNDX is 0.03 percentage points higher than SCHP’s (0.08% vs. 0.05%). BNDX is mostly comprised of A bonds and SCHP has a high exposure to AAA bond. Overall, BNDX has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare BNDX vs. SCHP. We’ll look at risk metrics and portfolio growth, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss BNDX’s and SCHP’s holdings, performance, and annual returns and examine how these affect their overall returns.
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|Name||Vanguard Total International Bond Index Fund ETF Shares||Schwab U.S. TIPS ETF|
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.
The Schwab U.S. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
BNDX’s dividend yield is 1.03% lower than that of SCHP (0.94% vs. 1.97%). Also, BNDX yielded on average 0.71% more per year over the past decade (4.63% vs. 3.92%). The expense ratio of BNDX is 0.03 percentage points higher than SCHP’s (0.08% vs. 0.05%).
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|BNDX Bond Sectors||Weight|
BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.
|SCHP Bond Sectors||Weight|
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Beta is 0 while BNDX’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
The Schwab U.S. TIPS ETF (SCHP) has a Alpha of -0.5 with a Treynor Ratio of 2.31 and a Standard Deviation of 4.32. Its R-squared is 66.16 while SCHP’s Mean Return is 0.28. Furthermore, the fund has a Beta of 1.17 and a Sharpe Ratio of 0.64.
BNDX’s Mean Return is 0.28 points lower than that of SCHP and its R-squared is 66.16 points lower. With a Standard Deviation of 0, BNDX is slightly less volatile than SCHP. The Alpha and Beta of BNDX are 0.50 points higher and 1.17 points lower than SCHP’s Alpha and Beta.
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BNDX had its best year in 2014 with an annual return of 8.83%. BNDX’s worst year over the past decade yielded 0.0% and occurred in 2013. In most years the Vanguard Total International Bond Index Fund ETF Shares provided moderate returns such as in 2015, 2017, and 2018 where annual returns amounted to 1.08%, 2.4%, and 2.94% respectively.
The year 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in BNDX would have resulted in a final balance of $13,695. This is a profit of $3,695 over 7 years and amounts to a compound annual growth rate (CAGR) of 4.63%.
With a $10,000 investment in SCHP, the end total would have been $13,032. This equates to a $3,032 profit over 7 years and a compound annual growth rate (CAGR) of 3.92%.
BNDX’s CAGR is 0.71 percentage points higher than that of SCHP and as a result, would have yielded $663 more on a $10,000 investment. Thus, BNDX outperformed SCHP by 0.71% annually.
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